Hmmm - not so sure about your economic rationalism here.

I'd think a more rational approach would be for BHP to pay the same for their water that industry elsewhere in South Australia does (including small business) - that would enable the water market to work correctly.

Overall I think it would be best if they were asked to supply their own water (from desalination plants on the coast) and power (from whatever source they please - I'd prefer a mix of solar thermal, wave, geothermal and wind - all abundant in SA - or they could build their own nuclear power plant, given how enthusiastic they are about uranium) too.

Problem solved - the rest of SA can go back to relying on local infrastructure and BHP can behave like some foreign multinational that is above the rules without putting any financial burden on the locals...

No, economic rationalism is not about a free market, but about deliberately crushing things which you consider to be unprofitable or undesireable.

If it was good enough for Thatcher's coal miners, it's good enough for Rudd's uranium miners.